Why the Freemium Business Model Isn't What It Used To Be

mattydread23 writes: A few years ago, every enterprise software company was trying freemium — the idea of giving a product away to build users, then charging for additional features. Now, that model seems to be losing favor, except with open source software. Business Insider talks to enterprise founders and VCs to figure out why 'freemium' wasn't all it was cracked up to be.

Comments

Re:B2B only

[Anonymous Coward]

It was possible to beat coin-op arcade games on a single quarter. You can't do that with the new pay-to-win model.

Re:B2B only

[Half-pint HAL]

If you think about it, ALL games are designed to be addictive. The sort of pleasure/reward sensations are really no different between paid, free, free-to-play, buy-to-play, or any other variation. Instead, what's different is that the microtransaction based free-to-play games purposefully slow down the effort/reward ratio over time, and force the player to either slog through longer hours of gameplay with fewer rewards per hour spent, with the temptation of being able to increase that ratio with real money.

There is a fundamental difference between traditional games and pure microtransaction harvesters. And the problem is...

The problem is that the microtransaction model encourages developers to negatively impact these core game mechanics.

If by "negatively impact", you mean "completely eliminates", then you're right, because there are two types of pschological "reward" in gaming. Microtransactions fulfill our desire for recognition and completeness, and they are, as the guys at Extra Credits say, pur Skinner-boxing (I would link, but the stupid iPad would wipe this message if I tried to find another webpage).

Traditional gaming rewards in a more subtle level -- mastery of mechanics gets you into an almost meditative "flow" state during play, and improved mastery means longer unbroken sessions of flow, which is exhilarating (even more so when the play is physical and high-speed -- eg skiing). Early computer games didn't do a lot of recognition, with the waves in Space Invaders, for example, being identical apart from their speed. The next step was to include some visual confirmation of progression, and Centipede did that by changing colour between stages, whereas PacMan relied on stage numbers and occassional interstitial animations, and Donkey Kong had multiple different screens. Then we had progression through a combination of these (Pengo had the baddies change colour on each level, accompanied with interstitial screens on the same every-third-level schedule as PacMan, Ms PacMan added multiple maps).

As I say, these supported the mastery of mechanics by making explicit how much you had improved. I'm a language hobbyist, and my early experience of language at school was frustration at a perceived lack of progress, which was demotivating. As it turned out, I was progressing relatively fast, but I just couldn't see it at the time.

But microtransactions often completely replace the core mechanics, and there is nothing to learn, nothing to master. There is no lasting flow state, just momentary shots of neurochemicals when you get a stupid fanfare noise on the screen and hit the next arbitrary milestone